Deciding if something is overpowered or not all depends on the plan behind it, and for something so high-tech sensitive as a gaming console it just doesn't make sense to implement the newest state of the art tech. There simply is a point of diminishing returns. By the time a console becomes limited in power you are just way better of replacing it with a new model, since that allows you to sell more devices. However for this to become profitable you need to make a profit on the device from the start, or only a small loss in the first year or so.
Take the 360 for example. By the time it's successor released it will have lasted 8 years. They could have released a less powerfull 360 for the same price making it profitable from the start, and then after 4 years release a new model. At that point we would have gotten a device that would have been more powerfull than the 360 is now. Then four years later(this year) release Xbox One. The bigger the investment from the start, the longer you have to keep the product on the market to earn your investment back.
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